Credit cards: A year in review, and what’s changed?

credit-card-year-review

In between investing in reusable masks and learning to ‘check in’, a lot went down in the credit card world last year. 

Aside from being asked to exclusively try to use plastic to limit the spread of Covid-19, credit card providers were also left with the task of managing redundant travel rewards programs and assisting financially vulnerable customers. 

To give you an official recap, we’ve broken some of the credit card news highlights over the last year.

What did credit card spending look like in the last 12 months?

The short answer, an absolute rollercoaster. 

First, credit card spending plateaued. In fact, a study conducted by data analytics and consumer intelligence company J.D. Power found that 42% of credit card customers decreased their usage last year. 

Mozo also found that 25% of Aussies received a ‘financial wakeup call’ during the height of the Covid-19 pandemic and made the decision to get debt-free once and for all. 

However, as we headed into the festive season, spending picked up again before dropping in Jan and spiking again in Feb of 2021. We weren’t kidding when we said it was a rollercoaster.

Credit card rates, featured and fees: What changed?

It’s not often you see credit card providers slash purchase rates on products, but given the financial strain the pandemic placed on many Aussies, priorities changed. 

In April 2020, Mozo reported that five providers cut rates on their cards between 25 and 100 basis points. Other support measures that were introduced were deferring repayments, waiving late fees and interest or lowering the minimum repayment amount. 

Like we said, credit card rates rarely change, even with the numerous RBA rate cuts over the last eight years. That’s why we decided to do some digging on the matter. 

According to our number crunch, credit card providers have profited a whopping $6.4 billion by not passing on RBA rate cuts to customers. The one card issuer who did pass on the most recent cut was Auswide Bank, shaving 15 basis points off its Low Rate credit card.

What about rewards cards and bonus point deals?

With international travel a no-go zone until further notice, many Aussies began to see their rewards card in a different light. 

We found that 66% of Aussies say rewards cards aren’t worth the return anymore and that the value rewards credit cards had declined significantly. And they might not be wrong either, as the average rewards card’s net value has plummeted from $126 five years ago to a mere $34 in 2020. 

But that didn’t stop rewards card providers from dishing out a bundle of bonus point deals to entice new customers. There were also cashback deals from providers big and small, including Amex, NAB, Westpac and BankSA.

How about Buy Now Pay Later or interest-free options?

Over the last few years, Buy Now Pay Later (BNPL) companies have taken Aussies shoppers by storm, promising interest-free spending and flexible repayment options. To combat this, big banks CommBank and NAB threw down the gauntlet and launched their adaptation: an interest-free credit card. 

NAB made a move first, releasing its ‘Straight Up’ interest-free credit card in September 2020 and CommBank shortly followed by revealing its Neo interest-free credit card in December 2020. 

Both cards promise no late fees and interest-free spending, however, there is a monthly fee based on the customer’s credit limit. 

The result? It was a hit. 

CommBank figures from a month ago found that one-third of all credit card approvals in December was for the Neo interest-free credit card, with more than half of the card’s uptake coming from millennials alone. 

American Express also moved to keep up with BNPL companies with their version, ‘Plan It’. 

Like BNPL, Amex customers can now make purchases ($150 minimum spend) using their card at any American Express-accepting merchant and pay them off in interest-free instalments of either three, six, nine or twelve months. 

Phew, that was a lot! 

But just in case you’re still hungry for more, you can head on over to our credit card comparison tool to keep up with some of the latest credit card offers around.

Compare low rate credit cards - last updated 13 August 2022

Search promoted credit cards below or do a full Mozo database search . Advertiser disclosure
  • Virgin Money No Annual Fee Card

    Virgin Money No Annual Fee for the life of the card. 0% p.a. for 12 months on purchases (reverts to ongoing purchase rate) and balance transfers (reverts to cash advance rate).

    Purchase rate
    0% p.a. for 12 months then 18.99% p.a.
    Balance transfer rate
    0% p.a. for 12 months and then 20.99% p.a.
    Annual fee
    $0
    Details
  • Apply By 31 Oct 2022
    Westpac Low Rate - Cashback Offer

    Enjoy a super low rate of 13.74% with 55 days interest free plus up to $200 cashback - $50 cashback for each month you spend $1,000 or more on eligible purchases in the first 4 months from card approval. New Cards only. T&C's and exclusions apply.

    Purchase rate
    13.74% p.a.
    Balance transfer rate
    6.99% p.a. for 12 months and then 21.49% p.a. (1.00% balance transfer fee)
    Annual fee
    $59
    Details
  • Apply By 31 Aug 2022
    St.George Vertigo - Balance Transfer Offer

    0% p.a. for 32 months on balance transfers requested at card application. 0% balance transfer fee applies. Rate then switches to applicable variable cash advance rate. No annual fee for the first year, $55 thereafter. New cards only, Eligibility criteria and T&Cs apply.

    Purchase rate
    13.99% p.a.
    Balance transfer rate
    0% p.a. for 32 months and then 21.49% p.a.
    Annual fee
    $55 $0 in the first year
    Details
  • Virgin Money Virgin Australia Velocity Flyer Card - Balance Transfer Offer

    Get in the air with a $129 Virgin Australia Gift Voucher each year. 0% p.a. for 28 months on balance transfers.

    Purchase rate
    20.74% p.a.
    Balance transfer rate
    0% p.a. for 28 months and then 20.99% p.a.
    Annual fee
    $129 $0 in the first year
    Details

^See information about the Mozo Experts Choice Credit Card Awards

Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.

While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.